Equity Method Investments and Membership Interests in Joint Ventures

The Company accounts for its investments and membership interests in joint ventures under the equity method of accounting if the Company has the ability to exercise significant influence, but not control, over the entity. Equity method investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investments may not be recoverable. Certain of the Company's investments are in development stage companies whose success depends on factors including receipt of permits and other regulatory environment issues, the ability of the investee companies to raise additional funds in financial markets that can be volatile, and other key business factors.

Below are the equity method investments reflected in the consolidated balance sheets:



Investee	Knight Hawk			DKRW			DTA			Tenaska			Millennium			Tongue River			Other		Total

Balance at December 31, 2010	$	131,250		$	21,961		$	14,472		$	9,768		$	—		$	—		$	—	$	177,451
Investments in affiliates	—			—			—			5,500			25,000			12,989			—		43,489
Advances to (distributions from) affiliates, net	(16,621		)	—			6,498			—			3,477			—			—		(6,646		)
Equity in comprehensive income (loss)	20,596			(2,246		)	(4,884		)	(2		)	(2,153		)	—			—		11,311
Balance at December 31, 2011	135,225			19,715			16,086			15,266			26,324			12,989			—		225,605
Investments in affiliates	—			—			—			—			—			—			—		—
Advances to (distributions from) affiliates, net	(7,151		)	—			4,335			—			8,798			1,708			—		7,690
Equity in comprehensive income (loss)	20,989			(4,200		)	(4,959		)	(2		)	(2,908		)	—			—		8,920
Balance at December 31, 2012	149,063			15,515			15,462			15,264			32,214			14,697			—		242,215
Advances to (distributions from) affiliates, net	(13,536		)	—			3,644			—			6,476			4,004			200		788
Equity in comprehensive income (loss)	17,279			(1,832		)	(4,969		)	—			(2,796		)	(282		)	—		7,400
Impairment of equity investment	—			(13,683		)	—			(15,264		)	—			—			—		(28,947		)
Balance at December 31, 2013	$	152,806		$	—		$	14,137		$	—		$	35,894		$	18,419		$	200	$	221,456

The Company holds a 49% equity interest in Knight Hawk Holdings, LLC ("Knight Hawk"), a coal producer in the Illinois Basin.

The Company holds a 24% equity interest in DKRW Advanced Fuels LLC ("DKRW"), a company engaged in developing coal-to-liquids facilities. DKRW has borrowed funds from the Company under a convertible secured promissory note. Amounts borrowed are due and payable in cash or in additional equity interests upon the closing of DKRW's next financing, bear interest at the rate of 15% per annum, and are secured by DKRW's equity interests in Medicine Bow Fuel & Power LLC. The note balance was $38.7 million at December 31, 2012. DKRW Advanced Fuels, LLC ("DKRW") had previously entered into an Engineering, Procurement and Construction Agreement with a Chinese company to construct and commission the Medicine Bow coal-to-liquids facility. However, as the project did not progress to the next stage of development, the Company recorded an other-than-temporary impairment charge of $57.7 million in the third quarter of 2013, which includes the Company's 24% equity investment of $13.7 million and the outstanding $44.0 million loan receivable balance. The impairment charges are included on the line "Asset impairment and mine closure costs" in the consolidated statement of operations.

The Company holds a general partnership interest of 21.875% in Dominion Terminal Associates ("DTA"), which is accounted for under the equity method. DTA operates a ground storage-to-vessel coal transloading facility in Newport News, Virginia for use by the partners. Under the terms of a throughput and handling agreement with DTA, each partner is charged its share of cash operating and debt-service costs in exchange for the right to use the facility's loading capacity and is required to make periodic cash advances to DTA to fund such costs.

The Company holds a 35% ownership interest in Tenaska Trailblazer Partners, LLC ("Tenaska"), the developer of the Trailblazer Energy Center, a proposed fossil-fuel-based electric power plant near Sweetwater, Texas. During the second quarter of 2013, Tenaska announced that it was discontinuing its development plans for the Trailblazer Energy Center in Texas. As a result, the Company recorded a $20.5 million impairment charge, which consisted of its 35% equity investment of $15.3 million and a $5.2 million receivable balance related to advances for development work. The impairment charges are included on the line "Asset impairment and mine closure costs" in the consolidated statement of operations.

In January 2011, the Company purchased a 38% ownership interest in Millennium Bulk Terminals-Longview, LLC ("Millennium"), the owner of a brownfield bulk commodity terminal on the Columbia River near Longview, Washington, for $25.0 million, plus additional future consideration upon the completion of certain project milestones. Millennium continues to work on obtaining the required approvals and necessary permits to complete dredging and other upgrades to enable coal, alumina and cementitious material shipments through the terminal. The Company will control 38% of the terminal's throughput and storage capacity, in order to facilitate export shipments of coal off the west coast of the United States.

In July 2011, the Company purchased a 35% membership interest in the Tongue River Holding Company, LLC ("Tongue River") joint venture. Tongue River will develop and construct a railway line near Miles City, Montana and the Company's Otter Creek reserves. The Company has the right, upon the receipt of permits and approval for construction or under other prescribed circumstances, to require the other investors to purchase all of the Company's units in the venture at an amount equal to the capital contributions made by the Company at that time, less any distributions received.

Summarized financial information of the Company's equity method investees follows:



	December 31
	2013			2012		2011
	(In thousands)
Condensed combined income statement information:
Revenues	$	208,289		$	190,661	$	184,358
Gross profit	10,234			15,308		19,495
Income from operations	6,574			8,898		13,180
Net income	(397		)	641		6,788
Condensed combined balance sheet information:
Current assets	$	52,413		$	78,961
Noncurrent assets	398,495			387,884
Total assets	$	450,908		$	466,845
Current liabilities	$	31,243		$	57,403
Noncurrent liabilities	131,445			128,489
Equity	287,903			280,690
Noncontrolling interest	317			263
Total liabilities and equity	$	450,908		$	466,845

The Company may be required to make future contingent payments of up to $58.5 million related to development financing for certain of its equity investees. The Company’s obligation to make these payments, as well as the timing of any payments required, is contingent upon the achievement of project development milestones, which can be affected by the factors named above.